Disclosure Costs – Can Legal Process Outsourcing (LPO) Be the Hero of the Big Bang?
With the implementation of the UK’s Jackson Reforms in April 2013, litigants will be faced, among other things, with the spectre of unparalleled scrutiny by the courts on the costs of disclosure. The upcoming Civil Procedure Rule 31.5 and existing e-Disclosure Practice Direction 31B are the key provisions. As Lord Justice Rupert Jackson pointed out, they “fit neatly together” to give the court more power to supervise and control the disclosure process to ensure it meets the overriding objective of a proportionate and cost-effective disclosure.
Under the new rules, the courts are empowered to select from a menu of potential disclosure orders. They will give directions at the first case management conference that will focus disclosure on the real issues between the parties. It will be more important than ever before to demonstrate that a proportionate and cost-effective disclosure strategy has been put in place.
Under new CPR rule 44.4(5), costs incurred are proportionate if they bear a reasonable relationship to:
- the sums in issue in the proceedings;
- the value of any non-monetary relief in issue in the proceedings;
- the complexity of the litigation;
- any additional work generated by the conduct of the paying party; and
- any wider factors involved in the proceedings, such as reputation or public importance.
Further, parties will now need to present an estimate of disclosure costs prior to commencing proceedings. Ultimately, it is the parties’ lawyers who bear the burden of ensuring costs are proportionate and reasonable, and that the case is properly managed to meet the budget. Effective case management will be critical to adhering to the case strategy and keeping within the budget, as parties may not recuperate costs that have not been reasonably or proportionately incurred.
Neil Mirchandani, a partner in Hogan Lovells’ Financial Services Litigation Group, states that, “We have saved clients millions of pounds by outsourcing first level review where appropriate, including outsourcing to India with Integreon. It is undoubtedly one of the main options available to help reduce the costs of linear document review.”
While leveraging advanced e-Disclosure technology tools will play an increasingly important role during the litigation process, there will be little opportunity to escape from a degree of manual document review. Automation can help to facilitate workflow, particularly for larger size data volumes, but there is still no such thing as a fully automated review.
With the cost savings associated with outsourcing manual review, the question arises whether, save in extenuating circumstances, a budget for the entire review to be run internally by the law firm will pass muster with the courts. Will the courts make outsourced managed review an imperative, more than just an opportunity to leverage cost-effective, experienced resources?
LPO solutions including managed document review are provided under a model that by its very nature minimises risk (through extensive documentation, governance, performance metrics, key performance indicators and service level agreements). Routine work is delivered by individuals who specialise in these activities.
Assuming a top tier LPO provider has been selected, the document review will be significantly more cost-competitive and also comparable (dare I say, better?) in terms of productivity and quality.
Vince Neicho, Head of Litigation Support at Allen & Overy, notes that, “[A&O] continue to recognise legal process outsourcing solutions are an important part of our ‘Suite of Options’ available to our clients. In addition to review on regulatory matters, this option is especially important in litigation, where we work with Integreon, as the efficiency of the disclosure process is a top priority of the court’s cost management agenda.”
By using a credible and experienced LPO provider like Integreon, litigants and their lawyers will benefit from:
- Cost certainty and predictability through per document / per project pricing.
- Choice of global delivery locations, including onshore delivery from the UK (particularly London), and allowing for a multi-shore “follow the sun” approach for around-the-clock progress.
- A more efficient review as deep domain expertise will ensure that the best strategy, expertise and technology are employed for each project.
- Consistent high quality results achieved through a highly structured document review process built to industry best standards, with added quality control.
- Scale and resources to provide and manage centralised document review holistically across the entire universe of an organisation’s data or a data set common to several organisations by leveraging the work across multiple related matters (for example, banks investigated by the regulators over the manipulation of the London Inter-Bank Offered Rate (Libor) and leverage that work across multiple matters. This avoids the re-examination of the same data set and ensures consistency across matters, which is critical for defensibility, and vastly improves efficiency and cost-savings.
- Credibility from working with a provider that is recognised by prominent industry analysts like Gartner, ValueNotes, the Black Book of Outsourcing and Frost & Sullivan, among others.
- Access to resources with foreign language skills.
Pioneering firms, such as Allen & Overy above, Simmons & Simmons and Hogan Lovells (to name a few) identified the benefits early on, adopted LPO, and now watch as both economic reality and regulation drive what was previously thought of as an innovative option to quickly becoming the norm. Perhaps the Big Bang (the Jackson Reforms) may not be the catalyst of change as it is commonly presumed, but rather a facilitator of change that is already well under way.
LegalTech New York
I will be speaking about the Jackson Reforms next week, including considerations from a US perspective, on Wednesday, January 30th from 3:45 to 4:45 PM Eastern Time at the LegalTech New York conference. Joining me will be Chris Dale (The e-Disclosure Information Project) and Steve Couling (kCura, an Integreon technology partner). Our moderator will be Integreon’s Juliet Hanna. The Jackson Reforms will be one of three topics covered during our Super Session at the conference.Tweet